Meeting

Virtual Media Briefing: Previewing APEC and the Biden-Xi Meeting

Thursday, November 9, 2023
Carlos Barria/Reuters
Speakers

Distinguished Fellow for Global Economic Policy and Director of the Greenberg Center for Geoeconomic Studies, Council on Foreign Relations

Stephen A. Schwarzman Senior Fellow for China Studies, Council on Foreign Relations

Senior Fellow for Southeast Asia, Council on Foreign Relations

Maurice R. Greenberg Fellow for China Studies, Council on Foreign Relations

Presider

President, Council on Foreign Relations

CFR experts preview the upcoming Asia-Pacific Economic Cooperation (APEC) forum taking place in San Francisco from November 11 through November 17, including the meeting between President Joe Biden and Chinese leader Xi Jinping.

FROMAN: Good afternoon. Thank you, everybody, for joining. I’m Mike Froman. I’m president of the Council on Foreign Relations. And we are delighted to be able to bring you four of our fellows today to talk about the upcoming meetings in San Francisco, the APEC meeting and the meetings on the side of the APEC meeting.

So APEC, as you—as you all know, is a group of twenty-one economies across the Asia-Pacific region. It accounts for about 60 percent of the global economy. It supports our exports to the APEC region. As I recall, our seven—support about seven million workers here. So it’s a critical part of the world for the United States.

The first APEC summit meeting was convened by Bill Clinton, President Clinton, thirty years ago, 1993, up at Blake Island, Washington, near Seattle. It returned to the U.S. in 2011, I believe in Honolulu, chaired by President Obama. And this is the third time it will be hosted here in the United States. We’re going to talk about APEC, but also around the action-forcing event it is for other diplomatic efforts. APEC itself is not a forum that tends to produce major concrete commitments that are enforceable. It’s not that kind of organization. It’s more a forum where issues are socialized broadly across the Asia-Pacific region, and then sometimes make their way into other negotiations and other mechanisms. But it’s been an important forum for the economies in the region to come together, work on integrating the economy, opening up the economy to each other, and also taken on a number of transnational issues as well.

On the margins of APEC, there are at least two very important events happening. One is the bilateral summit between President Biden and President Xi. And the other is the meeting of the fourteen countries of the Indo-Pacific Economic Framework. This is the agreement that the Biden administration has been pursuing with countries in the region around supply chains, the green transition, tax, anti-corruption, as well as trade issues. And we’ll talk about all that as well. And, of course, this Biden-Xi summit is much anticipated, after a rather turbulent year that began with the spy balloon incident. And so people are looking to this summit in important ways to see whether the relationship can be put on firmer ground.

With that, maybe I’ll start with you, Matt. Let’s talk about APEC itself. What the expectations are of what might come out of it, and then—you also know trade very well—feel free to comment on the IPEF agreement, the IPEF negotiations, what you expect to see there as well.

GOODMAN: Sure. Thanks, Mike. Well, you framed it very well. I think this forum, APEC, doesn’t get a lot of love. Some people say it’s four adjectives in search of a noun, the Asia Pacific Economic Cooperation forum. But, you know, it was an important part of U.S. foreign policy when it was set up, you know, thirty-plus years ago, because the U.S. has this long-standing military and diplomatic presence in this critical Asia-Pacific region, but it didn’t have a kind of comprehensive economic strategy. And so when the Bush senior administration first launched this, it was an effort to show the region that we were really committed economically. And that’s remained a theme. The work of the group is to promote regional economic integration and kind of development and capacity building. It’s got sort of thousands of strands of work, which some people think is, you know, too much. But it does create useful synapses among, you know, bureaucrats around the region, which is useful, and sort of share—they share norms and best practices.

Just in terms of what’s going to happen in San Francisco on APEC, there’s a whole sort of series of events that start with a multistakeholder forum on November 10. And there are going to be some other events around that. There are sort of officials meetings the next couple of days. Then the finance ministers are meeting, the APEC finance ministers. Secretary Yellen is going to be there on, I think, it’s the twelfth or thirteenth. That may have been announced. I’m sorry, I’m out in Korea and I may have missed the announcement of the actual timing of that meeting. Then Secretary of State Blinken and U.S. Trade Representative Katherine Tai are going to meet with their counterparts, the foreign ministers and trade ministers, on the fourteenth and fifteenth. And then there’s a CEO summit in parallel. And finally—an APEC CEO summit. And then, finally the leaders meet on the sixteenth and seventeenth. And, there’s usually a sort of day of various events, and a gala dinner, and things.

You know, the one other—I mean, the one thing, as Mike said, you know, this is not a forum where you really are going to get big headline news from the forum itself. The U.S. is promoting a theme of a resilient and sustainable future for all. So they’re trying to highlight the ideas of resilience, like supply chains being more resilient, sustainability, you know, environmental sustainability of our growth and development, and for all meaning, you know, a more inclusive approach to growth in the region.

If there are going to be any deliverables, there’ll be things like the just energy transition, or JET area, which is an area the U.N. has launched of these sorts of deals, of financing energy transitions that are both, you know, environmentally sustainable but also good for the economy, and workers, and so forth in various countries like South Africa, Indonesia. And, apparently, they’re going to—APEC may announce or agree on a set of principles for how to implement those JET practices or policies. Similarly, on food security, you may see disaster resilience. So there’s a kind of hodgepodge of many useful, interesting things, but not probably big headline news.

I’m sorry to take so much time on that, but just thirty seconds on IPEF, the Indo Pacific Economic Framework, Mike, if that’s OK. As you said, there are four pillars. The first is on trade. And that one, I think expectations should be quite low. The White House is signaling that, you know, there are going to be some things on trade facilitation, agriculture, and so forth, but not on the big three issues under trade—which are digital rulemaking, labor, and environment standards. Those three things, they’re signaling that we shouldn’t have high hopes of significant progress. On the other three pillars, supply chains, sustainable investment, and anti-corruption and tax, they’re signaling that there’s going to be an early harvest agreement with some useful progress, but not a definitive outcome, with work to be continued. So that’s sort of what I’m expecting from those two forums.

FROMAN: Great. Let’s go to Josh. Josh, a key dynamic here at APEC is really the whole ASEAN piece of this. How do you see what the Southeast Asian members are looking for out of APEC and—out of APEC and out of IPEF? And do you think they’re going to be satisfied with the outcomes here?

KURLANTZICK: I think generally the Southeast Asian states have been satisfied with the U.S.’ strategic position in the region in the recent years. Coming on the heels of part of this, there’s a bilat between President Biden and President Joko Widodo of Indonesia, where they will probably discuss more enhanced military security cooperation. Because Indonesia is, like a lot of the other countries in the region, concerned about China. The United States has already upgraded its security cooperation with Vietnam and the Philippines.

In terms of IPEF, though, and the general economic policy in the region, the Southeast Asian states I think generally are fairly tepid, at best, about it. For several reasons. One, one of the pillars of it, anti-corruption, is one that most of the countries in the region, in fact, are not really interested in. In fact, many of them rank among the most corrupt states in Asia, if not the world. Secondly, they have some interest in supply chain resilience and clean energy, but the U.S.—it’s not a trade deal, and the U.S. is not offering any market access in IPEF. And the Southeast Asian states can contrast that with actual trade deals that have been passed in Asia over the last seven years, including major, major trade deals that involve China, South Korea, Japan, and other big economies, as well as ASEAN being in the middle of that.

So they’re not going to say to the United States coming in with IPEF over the last couple of years, we reject this. They’re cordial and they do want a greater U.S. security presence. But in terms of IPEF as an actual economic policy, compared to some of the things that—Mike, that you worked on when you were USTR—some of which unfortunately did not come to pass, but not to your fault—it just—to them, it’s—I think they see it as a hodgepodge of several things, none of which is giving them what they want, which is a trade deal. Which is impossible in this U.S. environment, of course, right now. And even just some U.S. market access as part of that. So, yeah, there may be some modest gains.

And just one other thing I just want to briefly mention. Indonesia and Malaysia—Indonesia is the country with the most Muslims in the world. Malaysia is a heavily Muslim country. I would be shocked if Indonesia and Malaysia did not bring up both privately and publicly fairly strong statements about the conflict in the Middle East.

FROMAN: Do you expect APEC to actually have a statement on the Middle East?

KURLANTZICK: I do not expect that. That would be shocking to me. APEC doesn’t like to make controversial statements, and that would shock me.

FROMAN: Got it. Zoe, the long-anticipated Biden-Xi summit. In fact, the last time they met was a year ago in Bali, as I recall. A lot’s happened since then. What is expected out of this summit? Are you surprised by some of the recent announcements or hints as to what some concrete deliverables might be coming out of the summit? And what constitutes success here?

LIU: Yeah. Thank you, Mike.

You know, I would say that actually CFR played a very important role in sort of contributing to the stabilization of the relationship and contributing to the summit in a very important in a way, because here we—many of our fellows have put out a lot of thorough research trying to figure out what exactly is going on in the Chinese economy and why the United States should be concerned about the Chinese economy, rather than trying to take advantage of a slowing down of the Chinese economy, right?

And, you know, I think, going back to your point, compared with last time when President Biden and Xi met in Bali, November last year, I would say that the economic fundamentals have actually changed. Because at that time, most of the economies in the world were still struggling to recover from COVID, China was under a zero-COVID lockdown. But the hope for China’s post-COVID economic snapback was very high. Whereas in contrast, at that time the sentiment of the U.S. economy was less sanguine, but—you know, people were even concerned about a possible economic recession in the United States. But now a year later, it turned out that the economic situation actually very much flipped.

The U.S. economy so far has defied a forecasted recession. And, you know, latest numbers showed that by this third quarter our economy recorded 4.9 percent growth. That’s great. And in contrast, the Chinese economy has not only failed to recover quickly, but also falling into—you know, people describe this as an age of a malaise, and driven by both structural and cyclical factors. So from that perspective, you know, the Chinese government has not yet to come up with a stimulative policy of how to counter deflationary pressures. That’s why I think it’s very—it’s a very—it’s very positive that Secretary Yellen wrote her opinion piece figuring out that, you know, the relationship cannot be covered or defined only by strategic competition.

And I think, you know, in terms of how to—how to measure success, I would not to say that there will be—I would not define success as a concrete statement. But against that, I would measure success by the restoration of dialogue and conversation mechanisms. And if there are conversations about possible resume of military-to-military dialogue, that would be a major breakthrough. And the reason I mention this is because literally yesterday—Wednesday, yes. Wednesday in Asia time, Chinese top general, the deputy—Xi Jinping’s deputy in charge of the military visited Russia and I had a meeting with Putin. And they were talking about—or, you know, where Putin was praising China and the Russia’s military technology cooperation. I think that that’s not necessarily in China’s interest, since, you know, Russia, in many ways, are being devaluated or considered as a liability to the Chinese.

FROMAN: Ian, you’ve been studying these issues for some time in China. I mean, if you’re President Xi coming to this meeting, given all the challenges that Zoe just laid out, what do you need? And how important is this for your domestic support?

JOHNSON: Yeah. I think for Xi Jinping it matters more than it might have in the past, because he’s been through a rough two years. 2022 was punctuated by lockdowns, protests, which we hadn’t seen in years, and the abandonment of zero-COVID, and the subsequent rampage of COVID through the population death of more than a million people within a very short period of time. And then this year, very unusual political turmoil at the top. It’s hard to exactly figure out what’s been going on, but when you have—within a few months—or, two months, I think, the foreign minister, the defense minister, and the heads of this prestigious rocket force in the People’s Liberation Army all sacked or resigning in some way, you can see some unusual turmoil we haven’t seen in ten years for Xi Jinping. Plus, the economy not doing that well, youth unemployment being high.

So I think that for Xi it matters to be able to show to his domestic constituents, people in the Politburo, that he’s got the United States—that relations aren’t spinning out of control. You might recall at the beginning of the year there was the spy balloon incident. That was when things got pretty bad between the two countries. I think now’s the chance just to get things back on track. So from his perspective, what he’s going to probably want are just mainly the photos showing him with Biden, maybe a statement on Taiwan that we’ll find in in the readout where the United States pledges, again, which it always does, that it doesn’t support Taiwanese independence. China might try to frame that as it supporting a One China policy, which the United States doesn’t really do. But they’ll try to tweak it like that.

There might be some deliverables in terms of its cooperation on fentanyl. China produces the chemicals that are used to make fentanyl, exports them. For Biden, that would be nice to have to show to the heartland of the United States that relations with China are more than just some esoteric matter but can actually bring something to ordinary people. And I think they’re both probably looking at the Taiwan elections in January as a potential flashpoint. And I think they both basically just don’t want anything to happen in 2024. Biden, obviously, up for reelection. The last thing he needs is some sort of—another foreign policy crisis. He’s already got one on his hands right now in the Middle East. So I think for both of them, they want to just get relations back on track, stabilize the situation, so they can focus on their domestic challenges.

FROMAN: I think that’s right. Maybe I’ll just add a couple comments here. Like, on IPEF, I think, Matt, your description is a very good one. And I think we have to recognize that it’s been around for only eighteen months, which in the trade world is actually a relatively short period of time. So to have a pretty concrete agreement on supply chains and basically an agreement to flesh out the rest of the agreement on a couple other pillars, that’s, I think, a pretty—a pretty good—a pretty good outcome there. Clearly some ambiguity still as to what’s going to come out of the trade talks themselves.

You know, I think in terms of China, Ian, absolutely. I think, basically, this is a summit designed to draw a line under the relationship in the hopes that it doesn’t sink any further, heading into a very potentially volatile year, with Taiwanese elections in January, our own elections later in the year. And if they can get through that and create some processes that are meaningful to take on certain issues, like the ones you mentioned, and then in addition to maybe doing something on military-to-military communications, as Zoe pointed out, that would be a very—a very positive outcome.

The last thing I would say is, you know, the events is, in some ways—the fact that it’s happening is the most important thing. We’ve got President Biden and the administration demonstrating that the U.S. is committed to the region. We are a Pacific power. And we’re committed to showing leadership in the region, even as we have wars raging in Europe, and in the Middle East, and several other issues on our agenda, including the potential closure of the U.S. government here at home. And so, there’s a lot going on. And the fact that President Biden, and the administration are out there meeting, hosting this, is an important signal that we do care deeply about the U.S. leadership and equities in that part of the world.

With that, Meaghan, why don’t we open it up for questions.

OPERATOR: Of course.

(Gives queuing instructions.)

We’ll take our first question from Danila Galperovich.

Q: Thank you very much indeed. I hope you can hear me. This is Danila Galperovich from the Voice of America, Eurasia Division.

I have two questions, to anyone who wants to answer it. So, Middle East crisis in and consequences of Hamas attack on Israel have already been mentioned here. To what extent can China use this crisis as a lever to consolidate the Global South and its interests against U.S. foreign policy goals at these forthcoming APEC summit and in negotiations between Xi and Biden? And also, another question, do you see any prospects for United States to change China’s support, or at least supportive neutrality, for Russian aggression against Ukraine? Can a personal meeting help with this? Thank you very much.

FROMAN: Ian, you want to take that one?

JOHNSON: Yeah, I’d be happy to. Danila, those are interesting questions. I don’t think that you’re going to see any change on China’s position toward Russia. If anything, I think they’re concerned that Russia is in difficulty. They’ll probably be heartened by the fact that the Ukraine counteroffensive didn’t yield too much. But I don’t think they will change their position or likely that we could influence them on that.

In terms of the Middle East, it is clear from the rhetoric that they are taking a pretty strong pro-pan-Arab, pro-Palestinian position. But I think that’s sort of the limits of China’s game in this is. They don’t really have a strong leadership position here. They’re not sort of in a position to convene a peace conference. They don’t have concrete proposals. They mainly, I think, are happy if they can score some points in the Global South against the United States. But China rarely sticks its neck out in these kinds of areas. So I would be surprised that they would do anything more than just try to enjoy a little bit of schadenfreude.

LIU: If I can quickly chime in here on this issue, Mike.

FROMAN: Please.

LIU: I agree with Ian. And I would say that, you know, from what I learned, the Chinese government seems to be focusing on not mishandling the situation, rather than trying to assert a clear position. In other words, I don’t think the Chinese government or the party has figured out its crisis diplomacy strategy as the war in Gaza continues. I remember reading the news that since the war broke out, the PLA sent out six warships in the Middle East, but the Chinese diplomats that, you know, they were just there on routine escort missions, and they were not involved in the conflict.

And then, on top of that, despite the Chinese government say that, you know, the top priority should be preventing a humanitarian crisis, and yet, you know, the Chinese government has not yet organized any type of, you know, government-sponsored evacuation plan yet. So I really don’t think that the Chinese government really had any strategy to handle this. Perhaps they’re preoccupied or, like, you know, not overhandling it.

Q: Thank you very much.

KURLANTZICK: Can I just add one brief thing, since I wrote a book about this recently? I think that’s all true, but at the same time there’s another China that operates sort of below the radar. And there’s been quite a lot of evidence collected by the State Department’s counter-propaganda department and reported in the New York Times and other places, and I’ve discussed with them, that China has done a lot of reposting, reformulating, recapitulating a lot of massive misinformation spread by Iran, Russia, and to some extent, Hamas online, on social media. Whether that can be traced, you know, to Xi Jinping, cannot tell you. But there has been a dramatic, dramatic upswing in China reposting all sorts of misinformation about the conflict in the Middle East.

FROMAN: Thank you. Should we go to the next question?

OPERATOR: We’ll take our next question from Colleen Long.

Q: Hi there. I wanted to ask about the prospect for protest or other sort of, I don’t know, conference unrest, given the wildly divergent opinions on Israel and Hamas. I think last year we saw the U.S., of course, walk out in protest of the Russian delegation. I wondered if you were expecting anything similar this year?

FROMAN: Interesting question. I am not aware of anything that would come like that. You’re right, people have strongly held views. But I would not expect countries to walk out of the room because of U.S. support for Israel and its efforts to create Palestinian—or, excuse me, humanitarian pauses, and to engage more broadly in the region.

OPERATOR: Well take our next question from Anton La Guardia.

Q: Thank you very much Anton La Guardia from the Economist here.

I wanted to ask—to pick up again on the on the Middle East question. Which is, as these leaders come to San Francisco, is there a sense that the balance of power has changed as a result of the crisis in the Middle East? For example, is there a sense in Asia that the U.S. is distracted or overstretched now that it has to deal with a crisis in the Middle East, as well as the war in Ukraine, and a potential one in Taiwan? And the second question is on APEC and on IPEF specifically. It is often said that IPEF is a kind of, you know, diluted soup. The thing that people really want is more market access. The administration argues, look, you know, tariffs are low generally across the board anyway. There’s not much more to be done on the tariff side. Can you just sort of unpick that argument, and say what it is that countries actually want in terms of market access that’s not being provided by IPEF?

FROMAN: I’m happy to take the second part of it. But, Matt, why don’t you go—why don’t you go ahead and answer, and then I’ll comment on it.

GOODMAN: OK. Well, yeah, I think you’re right that the administration has been making that case. And you’re right that the average tariff—and, Mike you know, has those—as he may tell you, he used to carry around a card with, you know, how low our tariffs are. But there are some spikes in certain areas. So I think it’s true, but also a little bit missing—Josh, again, may want to comment on this—what countries actually are looking for in the U.S. Remember, we are the largest consumer market in the world. And there are—there are not just tariff impediments. In certain spike—in certain areas we have tariff spikes, like in clothing and footwear, which Vietnam, for example, is very interested in.

But it more generally, you know, there was a sense that our market could be, you know, more accessible through, you know, easier regulation, more access, you know, to that big consumer market. And so I think the reality is—and this is the final point. Whether they’re right or wrong about that, it’s clear—and, again, I’d be interested in Josh’s, you know, affirmation or contradiction of this—that the countries in the region think that this is a really important issue for them, to have more access. And so that is a reality out there. They think that IPEF is falling short in that regard.

And, sorry, one final point, which is that they also understand that in order to get the kind of support financially behind some of the initiatives in IPEF, the U.S. is going to need the Congress to provide authorization and resources. And since Congress is not involved in IPEF, I think they have skepticism about whether some of the things that are being talked about as deliverables are going to come through. But, all of that said, I do think that some of the things in IPEF are welcome. So it’s not completely dismissed by countries in the region. I think they do find it useful. If the U.S. is going to mobilize private investment in sustainable infrastructure, which, by the way, is an area that I think is going to be highlighted by the administration out there, I think that’s seen as useful. So it’s not that it’s not useful, but it’s not enough.

FROMAN: I would just add to that that in the context of the Trans-Pacific Partnership, where tariffs were part of it, it was important to know that half the countries in TPP already had free trade agreements with the U.S., they already had full access to our market. And yet, they still were willing to negotiate with us to raise their labor standards, raise their environmental standards, engage in better regulatory practices, because they wanted the U.S. at the table. They wanted the U.S. engaged in the region. And that logic is even more true today than it was then. And so I think sometimes there’s an overemphasis on tariffs. Average applied tariff rate in the U.S. is 3 ½ percent. As Matt said, I used to carry around a card of, you know, shoes, clothing, sugar, and trucks. I think those were the four areas where we still have high tariffs. and that’s about it. And for most of those countries, there are other things they want to export to us than that.

Finally, last thing I’d say about this is the U.S.’s greatest differentiating strength, the size of the market is obviously one but that’s largely open. it’s our innovation ecosystem, our R&D, our great universities, our risk capital structures. And I think there’s a lot to be done, including through IPEF, to engage with these countries and offer them access to what makes the U.S. really unique—a unique partner. And then finally, the last thing I would say is, leaving tariffs aside, there’s an awful lot to do among countries to talk about standards, and rules, and good regulatory practices, which don’t touch the tariff lines but still help countries engage more productively economically with each other. There’s a lot to be gained by the IPEF countries in having that conversation with the U.S.

So next question.

JOHNSON: I can answer the question—

FROMAN: Oh, I’m sorry. I’m sorry, Ian, I forgot the first part.

JOHNSON: Yeah, no, I can answer the question also about whether the U.S. is stretch too thin, some vulnerability. I think there is a bit of a perception there, certainly, for China, that the—and you can see this over the past decade or so. The U.S. had the—in the Obama administration had the pivot to Asia, this emphasis on—greater emphasis on Asia. That Europe and the Middle East were, if not solved, at least they were under control, and we didn’t need to spend so much time there. And now it’s like we’re trying to pivot back to those areas. And we hope that Asia will sort of take care of itself. So I think there’s a bit of a problem there for the U.S. Whether it’s stretched too thin or not, that’s, you know, another matter. But certainly, China probably would like it to be like that, and would see some opportunity here. Even perhaps some of its actions toward the Philippines might be seen in that light over the past week or so.

KURLANTZICK: Could I just add to that? I mean, I think the Philippines recognizes that—Philippines and Vietnam, above all. Philippines has now enhanced defense cooperation with Japan. That is a—which is controversial on both sides. But that is an obvious signifier that the Philippines is looking for more backup, because they are in a desperate, dire situation. And they are looking for backup and the idea that if the U.S. is distracted, they have another major power behind them.

LIU: And I would add a footnote here, in that in a sense that this is actually not the first time that the United States has to deal with a major international crisis and the politics are fragmented at home, whereas things are different for China. In other words—and, Anton, really thank you for your question. You know, your point about to what extent the United States is distracted. But I think this applies to China as well, because, you know, China literally—last year, right. it’s during COVID when all the major Middle Eastern leaders visited Beijing. And Foreign Affairs, we had this issue talking about, you know, are Middle East looking towards the East and the moving forward? In other words, is the Middle East—are Middle Eastern economies sort of looking to China?

And last year, as well as this year, there have been, you know, SCO, Shanghai Cooperation Organization, the expansion. There have been BRICS expansion. You now have, you know, basically Saudi Arabia and Iran becoming, you know, sort of China’s friend circle. But this really does not necessarily mean that China necessarily can afford to be distracted abroad, especially when President Xi Jinping really has to handle his domestic economic situation very carefully. And he also tries to handle, or continues, his anti-corruption campaign. And among all these different, you know, economic and foreign relations challenges, China does not even have a defense minister. So from a lot of these issues, I guess my point is, that the United States has handled this before, and whereas China has never.

FROMAN: Good point.

Meaghan, next question.

OPERATOR: We’ll take our next question from Farah Stockman.

Q: Hi. Farah Stockman from the New York Times.

I’m curious whether you feel that Biden has had made some promises in Bali a year ago. You know, not to pursue a Cold War and certain things like that. Has he kept those promises, I guess, is the question? And I’m also—I’m also working on a piece about sort of the golden age of U.S.-Chinese relations and sort of what might come next. I’d love to hear each of you, or as many—as many of you as we have time to hear, characterize what you think the next stage should be, now that China is a peer competitor.

FROMAN: Zoe, you want to start off on that one?

LIU: Sure. Farah, thank you very much for your question.

You know, in terms of has Biden delivered his promise in terms of not heading towards a Cold War? I think the U.S. government has been very careful in terms of communicating the ideas, the goal, which is it doesn’t matter what we are doing here in terms of export control, in terms of screening—investment screening, not just inbound through CFIUS, but also outbound through the executive order. I think we are trying—the Biden administration has been doing a very good job making sure that the idea of a small yard, higher fence is the goal. And the goal is specifically to not to target against the strengthening of the Chinese military. But to what extent this message is being very well received in Beijing, that’s a different matter. Because from China’s perspective, or Chinese policymakers’ perspective, you know, all these cheap restrictions, as well as investment screening, really, from China’s perspective, it is—it seems to be aiming at slowing China’s development.

So I think there is a perception gap there. But the good thing is that lately there is this Morning Consult survey showing that, compared with about a year ago when, you know, there were about—in China a year ago, there were more than 80 percent of Chinese people who did the survey considered the United States as an enemy. Whereas the latest survey showed that there is less than 50 percent of thinking that the United States is an enemy. And more than 75 percent people thinking that U.S. and China—the Chinese government should handle relationship with the United States better. So from that perspective, Farah, I think that’s a good—that’s a good sign.

And in terms of the golden era, I think this—I consider myself as a golden era U.S.-China relations in a sense that, you know, I grew up in an era where I considered—I considered going—at least many people in my generation considered going to the United States to study is a great thing that you need to be proud of and people feel excited about all the opportunities. But especially during COVID, I would say, you started to see all these online discussions—and I think Josh would have more insight into it, as well as Ian—you know, you started to see people calling out all these Chinese—the graduates from Chinese top universities to study in America, calling them as traitors, saying that why, you know, you took the government money and the Chinese government, you know, supported you, and yet you betrayed your motherland. I think this narrative is bad in a sense that you don’t want people to start to be less interested in the people-to-people relationship. And that’s why I think, you know, this APEC meeting of President Xi Jinping and Biden, even if there aren’t—the summit itself did not—does not generate concrete deliverables, at least it is a good sign in that, well, it’s—Chinese people feel safe in that, well, it just seems that, OK, so we moved beyond the turbulence year.

KURLANTZICK: Can I just add to that? I mean, Ian has a lot in his great FA article, as well, that he wrote about China’s isolation. I mean, it works both ways. And you know, fifteen years ago there were something like sixteen (thousand) or eighteen thousand U.S. students studying in China at Hopkins-Nanjing and there was, you know, many other places. I believe that the number is now down to four hundred or five hundred, almost exclusively at NYU’s Shanghai campus as well as—I think that’s it. And so—

JOHNSON: (Inaudible.)

KURLANTZICK: So the number—the interaction of students is, like, almost nil. Foreign reporters, thrown out of the country. And so I think this is important at a high level, but those people-to-people contacts need to be reestablished or you’re going to—you’re going to lose that completely, and you’re going to also have the next generation of U.S. China experts who never went to or went to school in or, et cetera, in China. That is not necessarily the U.S.’s fault; that is primarily China’s fault. But it is—the people-to-people contacts are deteriorating dramatically very fast.

JOHNSON: I’d just say something to put it a little bit more in the U.S. court, though. I think that the Biden administration has failed to outline a bigger policy toward China beyond defensive strategies. Like, we don’t want to sell them cutting-edge technologies, we don’t want to do this, we don’t want to do that. Those are all legitimate goals, in my view, but there has to be a bigger view where we say we do want people to people, we do want student to go to China.

After the Trump administration, for example—just one concrete example—killed the Fulbright Fellowship Program, the Biden administration hasn’t at least publicly, to my knowledge, asked for that to be restarted. Now, of course, this is something that China wouldn’t want. I don’t think they want grad students traipsing through the hills of Yunnan looking in villages and poking their noses in places where they don’t belong. But at least put the ball in China’s court, right, and show that we do want these kinds of interactions. We can’t have—as Josh said, we can’t have a generation of Chinese—of China hands who’ve never been to China, but this is sort of where it’s heading. And if we don’t watch out—the number of students, as Josh said, is pathetically low right now, and there doesn’t seem to be any realistic chance of turning that around.

So I think there needs to be some signaling from the top. It’s not only the administration’s fault, but there has to be some concerted effort made to change that, or else there—we don’t need to get it back to that golden age in the past, but at least something that, even in U.S. interest, we need to have people who understand China and understand it by being there.

FROMAN: Great.

Meaghan.

OPERATOR: We’ll take our next question from Jessica Stone (sp).

Q: I have two questions regarding countries that begin with the letter I. The first is your take on the chances or the level of support inside the United States for India joining APEC. And the second is: What kinds of deliverables do you foresee with respect to the U.S.-Indonesia relationship, particularly around critical minerals? Thank you.

FROMAN: Josh, do you want to start?

KURLANTZICK: I think at the bilat between President Joko Widodo—Jokowi—and Biden, the focus will be President Widodo or Jokowi will make statements about the Middle East because he has to and they will agree to disagree. They will agree on moving the U.S.—Indonesia’s military platform slowly away from its Russian platform, which dates to the Soviet era, and more to the U.S. platform, even though it’s more expensive, and on more enhanced exercises. I don’t think we’re going to see some agreement on critical minerals between the U.S. and Indonesia.

And, frankly, President Widodo has never been that interested in foreign policy in general. It’s just not his thing. He was a mayor of two places, and these types of events are sort of not his core strengths. But I don’t think we’ll see some agreement on critical minerals.

GOODMAN: India, Mike, do you want me to take a shot at that?

FROMAN: Yeah. Why don’t you?

GOODMAN: I mean, I do not think there is a prospect of India being invited to join APEC soon. For a long time, that was because India did not show a real commitment to the mission of APEC to promote regional economic integration. India’s been quite, you know, sort of inward-looking and not interested in engaging seriously on trade issues. That has, obviously, changed somewhat, and there does seems to be a little bit more interest in India in engaging in regional economic integration. And of course, the strategic imperative of pulling India more closely in with us is maybe changing that calculation. But I don’t think that’s led to a serious conversation about them joining APEC. I think the focus is more on other forums like IPEF, but also the Quad and other bilateral engagements.

FROMAN: Great.

Next question, Meaghan.

OPERATOR: We’ll take the next question from Sara Schonhardt.

Q: Hi. Thanks for doing this. Sara Schonhardt from E&E News.

I have a question probably for Zoe. The meeting between, or I guess the expected meeting between Biden and Xi comes ahead of global climate talks in Dubai, and I am curious what you think—what signals they could potentially send that would impact those talks or what you might be looking for that would lead to perhaps positive outcomes at talks in Dubai.

LIU: Yeah. Thank you, Sara, for the question.

I think, you know, your mention of the timing is actually quite interesting and important. The observation you made is quite—is quite shrewd. And I would—I would argue—well, you know, this is—actually, many people would perhaps agree in that, you know, the U.S.-China relations, even in its down time, climate has always been the theme that actually can bring two parties together. And last year, if we—if we think about the last time when President Xi Jinping and Biden met, Xi Jinping actually talked about, you know, climate and green cooperation, and that was also in his bigger message to APEC summit last year.

So in terms of to what—to what extent this Biden-Xi meeting can directly impact sort of deliverables in the—in the meeting of Dubai, I’m a little bit suspicious in that—for two reasons. I mean, I’m not saying that this is—this is not conducive, but in terms of how much this can make a big difference I’m relatively suspicious for two reasons.

Part of the reason comes from China. You know, China—the Chinese government has basically doubled down its state-led investment plan. Instead of investing in real estate sector, the government is channeling money to support electric vehicle, provide subsidies for Chinese customers to buy, and the government—the Chinese government is also building—investing in a lot more renewable manufacturing capacity. So, you know, a lot of this basically means in the—in the next five to ten years a lot of this, if global demand maintain the current trajectory, China is going to produce a lot of global excess capacity. And knowing that, the United States here is also doing a lot of industrial policies through this—you know, the Inflation Reduction Act and Build Back Better. A lot of these are also, basically, trying to bring things back here to the United States. I’m just worried that, you know, these two big economies are not necessarily leading—while they are talking about, you know, climate cooperation, but the undertone in terms of competition, in terms of supply chain de-risking is still there. And on top of that, China still dominates global supply chain of critical minerals, and yet the United States also build its own critical mineral partnership—of which India is actually a partner.

So from that perspective, I am really concerned about this bifurcation. But that’s sort of like the undertone. You know, big—you know, in the COP meetings you’re always supposed to sort of, you know, trying to figure out how countries can move forward together. But the practicality of the deliverables I’m a little bit suspicious.

Thank you, Sara.

FROMAN: Meaghan.

OPERATOR: We’ll take our next question from Isabelle Mateos y Lago.

Q: Sorry. That was not fully deliberate, but actually I did have a question.

We haven’t mentioned—you haven’t mentioned, or barely, the issue of Taiwan, apart from saying Biden will reiterate the general message. However, in the Chinese press there seems to have been an intensification of messaging from Chinese leadership. And do you think there is, if not in public, at least in sort of backstage a desire of the—on the U.S. side to try and convey certain messages on this front or a perception that perhaps this is something where the Chinese leadership is also moving in a direction that is not necessarily welcome?

FROMAN: Ian, you want to take that? Yeah.

JOHNSON: Yeah. Sure. I mean, I think China’s kind of getting desperate. They really want the KMT to win the election. The problem is that the anti-DPP vote is split right now, and it could be that DPP wins. So China doesn’t really have a great strategy for dealing with the elections in Taiwan, except to hope that the KMT will win.

I think what they might try to do during the summit between Biden and Xi is get some pledge from the United States not to support the DPP, which I don’t think the United States is going to do or would want to do anyway. From the Biden administration’s point of view, they would probably caution China against meddling in the election, although I think that probably anything China does in terms of the election is going to be counterproductive, because if it’s perceived in Taiwan that China’s trying to help one party or another that would boomerang against that party.

So I think it’s a—it’s a difficult situation for China because it doesn’t really have a sophisticated way of dealing with public opinion in Taiwan. And this is sort of befuddling, I think, to an authoritarian state; you know, how are we supposed to be dealing with an election? The smart thing would be just to sit on the sidelines, and then after the vote come to some agreement with whoever is elected. But I don’t think they’re going to—I don’t think they’re able to do that constitutionally, so that’s why you see these—this messaging—just sort of crude messaging in the Chinese media.

FROMAN: Matt, correct me if I’m wrong, but this is—APEC is one of those few forums where Taiwan is present with China.

GOODMAN: That’s right. Under the name Chinese Taipei, Taiwan does have a seat in APEC, as does Hong Kong. And by the way, for reporters, I always remind you make sure to call these twenty-one economies, not twenty-one countries, or you’ll get a nasty note from Beijing about that. But, yeah, that’s one of the small but important sort of strengths of APEC, is it does allow Taiwan a little voice in this economic gathering, at least.

FROMAN: All right.

Meaghan, do we have one more question?

OPERATOR: Our last question will come from Robert Delaney.

Q: Hi there. Thanks very much. Yes, Robert Delaney, South China Morning Post.

Could anyone venture an opinion on when we look at the—what we’re expecting to be the Biden-Xi bilat at APEC, given the domestic circumstances they’re facing—that is, China with its economic issues and, of course, Joe Biden with not-so-great popularity rates—who—which of the two is under more pressure to sort of give something, to sort of do—take some action, make some concession in order to walk away, you know, as—with a—with a meeting that could be considered as constructive?

FROMAN: I’ll take a shot at that, but, please, everyone else feel free to chime in.

Look, I don’t have a license to practice politics, but it doesn’t strike me that making a concession is a positive thing from President Biden’s point of view, given the strong bipartisan and public view on the importance of standing firm vis-à-vis China. So, yes, of course he wants to be seen as managing the relationship well, but I don’t think there’s any incentive for him to be making concessions.

And in terms of China, I think both parties, including China, want to have a successful summit. Again, I’m not an expert on the domestic politics of China—I’ll leave that to Ian and Zoe—but my sense is that whether you call them concessions or not, stabilizing the relationship by taking steps to defuse certain issues I think would be very much in China’s interest.

JOHNSON: Yeah. I would just say that maybe if you wanted to be provocative you could say that China in some ways is under more pressure to have a successful summit. I don’t think they necessarily need to make concessions. But for Biden, the main thing is just to show that China is sort of under control, to make sure that nothing blows up next year while he’s focused on the election campaign.

Xi Jinping is under a lot of pressure, especially on the economy, that many people would see as directly related to ties to the United States. His turning back on the reform and opening policies of his predecessors is also in some ways tied to worsening relations with the United States. So I think he needs to sort of show that ties to the United States are OK not just for foreign policy reasons, but also for domestic economy reasons, to show that he’s committed to this program of reform and opening which he’s kind of abandoned over the past few years. So in some ways, I think it’s more important for him.

I don’t think Biden, if he gets the fentanyl agreement or not, that’s not going to make or break the election campaign for him next year. In fact, most of these foreign policy things almost never have that big of a(n) impact. So, yeah, provocatively I would say it’s probably more important for Xi than Biden.

GOODMAN: Can I—can I just add one thing to that? Which is that my sense from the White House is that they, if anything, are going to try to—you know, they feel a little wind at their back and they want to try to highlight that the U.S. is doing pretty well economically, which is a message that—you know, that the president wants to emphasize anyway. And relative to China, you know, they’re not going to be too in-your-face about that, but I do think that they’re going to try to show that, you know, our model, our system, our investments, our policies are producing better results than China’s. And that’s going to be a subtle theme throughout the week.

LIU: I would agree with Ian in that probably the pressure for President Xi Jinping to at least deliver a successful summit is higher, for economic reasons as well as for managing the domestic unrest situations. Part of the—a lot of—there are a lot of report talking about, you know, since COVID many Chinese people who have means already—have already, you know, either got their second houses or second passports. Even—or for those who doesn’t have—who don’t have means, the venture through the—through Central America, the Darien Gap, and trying to show up at the Mexican border. So from that perspective, I do think President Xi Jinping has—probably has more pressure, whereas, facing an election year, probably President Biden does not want to appear to be soft on China. So from that perspective, perhaps he’s less—he probably has less pressure to be conciliatory.

FROMAN: Perfect. Thank you, everybody. You can find more material on these issues from these fellows and our other fellows, of course, at CFR.org. And I believe this briefing—correct me if I’m wrong, Meaghan—will be posted online soon as well.

Look forward to staying in touch. And for those of you in San Francisco, we look forward to seeing you out there as well. Thanks very much.

(END)

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